Number of the Day Shows How Volatile Bitcoin Can Be
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That’s how much the value of Bitcoin has swung over the last three days, according to cryptocurrency platform CoinDesk.
Bitcoin reached an all-time record high Friday when it hit $41,962.36. However, by Monday it dipped to $30,305.30—a drop of $11,657.06, or 28%, in just three days. Despite the volatility, at market close on Monday Bitcoin was still up 90% since this time last month, and 326% since this time last year. Until Dec. 16, 2020, the cryptocurrency had not breached $20,000, according to CoinDesk’s data, which dates back to 2013.
According to Tom Essaye, former New York Stock Exchange trader and current founder and president of financial markets research firm Sevens Report Research, Bitcoin’s rise was fueled by concern over stimulus spending now that Democrats are in control of Congress.
“The rally in Bitcoin is the market expressing its concern that all this government stimulus and spending will eventually lead to higher inflation and a weaker dollar,” Essaye said. “Going forward, the pace of the rally in Bitcoin isn’t sustainable, so don’t be surprised if it drops in the short term.”